Crowding out occurs by:
a. causing reduced government purchases of goods and services.
b. reducing the value of the multiplier used for government purchases of goods and services by increasing the interest rate.
c. reducing the value of the multiplier used for government purchases of goods and services by increasing the marginal propensity to consume.
d. reducing the value of the multiplier used for government purchases of goods and services by decreasing the marginal propensity to consume.
e. causing reduced imports of goods and services.
Question 2
The unemployment rate does not reflect the true extent of the unemployment problem. Which of the following groups is not counted as unemployed in the official unemployment statistics?
a. The underemployed and the cyclically unemployed
b. The underemployed and discouraged workers
c. Discouraged workers and the frictionally unemployed
d. The frictionally unemployed and the structurally unemployed
e. The cyclically unemployed and the frictionally unemployed
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